Meditech continues to climb back from a three-year backslide, reporting its third straight year of revenue growth.
The Massachusetts-based electronic health record (EHR) vendor reported $493.8 million in revenue in 2019, a 1.2% increase from the previous year’s $488.2 million, according to year-end financials reported to the Securities and Exchange Commission (SEC).
The company suffered a three-year slip during which it saw revenue drop more than $117 million. The company’s sales dropped gradually since 2013 when it posted nearly $580 million in revenue. In 2014, Meditech posted $517 million in revenue and that dropped to $475 million in 2015, followed by year-end revenue of $462 million in 2016.
The company rebounded in 2017 and reported $481 million in revenue, a 4% increase from the previous year. Meditech’s revenue continued to grow in 2018, up 1.5% to $488.2 million.
The company credits last year’s performance to higher bookings which generated $9.3 million in revenue, offset by a $3.5 million reduction in product revenue due to initial implementation delays.
The company's profits jumped 220% from $56 million in 2018 to $180 million in 2019, with much of the increase driven by an $89 million gain from the sale of an office building.
The company saw its effective tax rate increase from 6.6% in 2018 to 20.5% in 2019 due primarily to significantly higher income in proportion to credits against taxes, the company reported.
Meditech had previously benefited from tax reform legislation passed in December 2017. The company’s tax rate dropped from 19.8% in 2017 to 6.6% in 2018, adding $12.2 million to its net income. That tax rate decrease followed a previous drop in the tax rate from 28.5% in 2016 to 19.8% in 2017.
As the EHR market becomes increasingly consolidated, the EHR software vendor will be challenged to hold its ground.
Hospital consolidation has helped its competitors Cerner and Epic gain more market share with the two vendors now controlling more than half of the hospital EHR market, according to KLAS Research.
Meditech now has 16% of the acute hospital market, KLAS reported. Among all acute care hospitals across the country or 5,400 hospitals, Epic and Cerner together control 54% of the market. That market share has grown since last year as other EHR vendors’ market share has dropped.
This year, Meditech was ranked as the top-performing EHR solution for community health information services in KLAS’s annual software and services report.
The EHR vendor has 3,531 staff members, and about 2,200 active healthcare sites throughout the United States, Canada, and the United Kingdom.
The company has been collaborating with tech giants. In October, Meditech announced a partnership with Google Cloud, making it the first company to offer its EHR through the Google Cloud Platform. The two companies also plan to develop native cloud products and application programming interfaces.
The EHR vendor also partnered with Apple to make the tech giant's Health Records feature available to Meditech Expanse and 6.0 EHR clients. Patients enrolled in Meditech's patient portal now have access to their health records via iPhone.
In April, Meditech launched a new professional services division designed to maximize its Expanse EHR.
The company also focused on international growth in 2019 as well as expansion in the U.S. Meditech UK became an accredited supplier by the National Health Service and NHSX. The company also deployed its Expanse EHR system at Aga Khan University in Nairobi, Kenya in September with plans to roll out the EHR in Karachi, Pakistan.
The health IT company also has been making investments to add new tools and capabilities to its EHR software, such as population health and analytics tools through a collaboration with Arcadia Healthcare Solutions. And the company also worked with Nuance to integrate its AI-enabled voice assistant into its platform.